Is it permissible to turn away from an atheist and refrain from returning his greeting if he greets one?

This man has become an apostate, as you mentioned. He must be invited to Islam to the best of your ability and capacity. Otherwise, shun him and do not speak to him, as a precaution against his poisons and a deterrent to him from what he has fallen into. It is not permissible for you to initiate greetings with him, nor to return his greetings, unless you believe there is an overriding benefit in doing so, such as winning his heart over and hoping for his return to Islam.